The Colts cannot trade Peyton Manning
Using the numbers from Brett Mock, Joe Baker, and reader "Sarcasm", Greg Cowan shows us why it's impossible for the Colts to trade Peyton Manning.
Peyton Manning's name has been mentioned in numerous trade rumors lately. If you believe the rumors, it may seem as if just about every team in the NFL will be making a trade offer for him this off-season. Most media outlets seem happy to report on these rumors as if they were realistic: they get the reactions of players on the rumored destination, they get their experts to talk about how Manning would improve each team, and they talk about how that team would invariably become an immediate contender.
What they fail to mention, however, is that it will be all but impossible for the Colts to trade Peyton Manning and still field a legal team.
Using numbers from Joe Baker's article on Manning's contract (with an assist from reader/commenter named "Sarcasm") and from Brett Mock's article regarding veteran contracts, we can do some basic math and look at the reality of the situation.
The NFL's Salary Cap in 2011 was approximately $120MM. There is not expected to be much, if any, increase in the 2012 cap. For argument's sake (and to further make our point) let's work off of a 2012 Salary Cap of $125,000,000.00.
Based on multiple reports from experts such as John Clayton and even Colts owner Jim Irsay's own words, the Colts are already at or over the 2011 salary cap.
Using the most Colts-friendly numbers from Baker's article, the team would incur a $38,400,000 hit for trading Manning after paying him the March 8th bonus. Assuming they were already at $120,000,000.00, this would now put them at $158,400,000 for our hypothetical $125,000,000.00 cap.
In order to get under the cap, the Colts would obviously have to shed salary. Now we'll turn our attention to Mock's article. Using his numbers, we see that the Colts could save $13,600,000 on the cap by cutting the following veterans after June 1st, 2012: Dallas Clark, Gary Brackett, Joseph Addai, Melvin Bulitt, Adam Vinatieri, Jerry Hughes, Donald Brown, Antonio Johnson, Zac Diles, Fili Moala and Justin Snow.
If we remove the $13,600,000 from our $158,400,000 cap, we find ourselves sitting at $144,800,000, almost $20 million over our hypothetical Salary Cap. And if the Colts were to pull the last rabbit out of their hat and cut Dwight Freeney and Antoine Bethea? The Colts would save an additional $17,235,000 against the 2012 cap.
At this point, the Colts would still find themselves around $3,000,000 over the cap. They will have cut almost every productive and useful veteran from their roster. Most importantly, from a cap standpoint, they will still have to replace the cut players. Even if they replace them with minimum-salary scrubs, the Colts will still find themselves close to $10,000,000 over the 2012 salary cap.
So while it is nice to dream up potential trade scenarios for Peyton Manning, the fact is, they would be better off paying Manning his option bonus to sit on the couch watching "Hannah Montana" than they would be trading him.
@gizzardfanny I never said "reworked for less money" I said "reworked". Technically he took less money last year. If I remember correctly, at a pro bowl Manning and Harrison were interviewed and Peyton said he would take less money so the Colts could keep Harrison. What the details were, I don't know. I just know we resigned Harrison. Either way, I think you're splitting hairs and my point remains the same.
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I have a question for all of the people out there that understand the cap. It is a legit one, that I don't really get.
Who complained about Manning's contract when it was signed last year? When the details of what it was came out, I seem to remember most people being pretty happy about how it was set up and how it worked with the cap. Am I missing something? I know that the cap is "frozen" essentially this year, but it will go up the next few years after that. Likely by considerable amounts. I just don't remember all of the nashing of teeth around his contract when it was signed.
If Manning's contract didn't kill the Colts when it was signed a year ago, there must have been a plan in place for how it wouldn't cripple the cap in future years. I just don't see how his contract goes from "high, but worth it" to "team and cap crippling" in less than 12 months. What happened?
I think Nate also said, in a comment elsewhere, that the cap was expected to go up this year. So since it didn't, that makes it tighter with so many contracts expiring at once.
It seems like the rookie wage system would offset that -- less space needed for this year's picks --but maybe they anticipated that and already accounted for it - ?
@pierrezombie@Music Man@gizzardfanny I shared that feeling, Music Man, and as pierrezombie is saying, apparently it´s linked to the fact that the cap didn´t go up this year. Which still surprises me, because certainly teams have an idea about what will happen with the cap a few years in advance, no?
@Music Man Manning was injured, that's what happened. The reason it can kill the cap is that he might not play or if we cut/trade him.
It is totally worth it if he plays.
For some reason I can't reply to comments already posted. As far as declining the option to renegotiate goes, I would think it would only be an option if Manning chooses to do so. Remember, Manning and Irsay ironed out the details of this contract, and Manning was concerned about the team staying competitive. It was Irsay who insisted that Manning was the highest paid player in the league, not Peyton. Peyton wanted to make sure there was money left over to pay other key guys. Manning has reworked his deal on more than one occasion, so in a perfect world you would hope so, but so much has changed. Peyton wants to win. He made that clear last year. You have to wonder if he even wants to return after Irsay said the Colts were in rebuilding mode. I have my doubts that he will want to return to a team that plans on benching it's #1 draft pick, and may not resign key free agents. Maybe if Peyton recieved a guarantee from Irsay that he will do everything possible to keep the Colts in Superbowl contention, (Trading the 1st pick) he would be willing to renegotiate. I really believe that Peyton wants to retire a Colt, but who knows if he will be willing to return to a team that seems to be building for the future.
@Peyton for President Peyton has never reworked a contract to take less money. He has converted bonuses (so the cap hit would get prorated).
Another post that perfectly breaks down the financial consequences of the choices the Colts face this offseason. Thanks, Greg. You´re all on fire regarding these issues.
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Can the Colts decline the option on Peyton before March 8th, making him a free agent and voiding his contract, and then negotiate a NEW deal with him?
Yes, they could go that route, but then you're allowing Manning to become a FA, and any team would be allowed to negotiate with him @Posting Anon
@Posting Anon Yes but that presumes he will do that. I don't think that's really an option for either side right now. It would be an incredible show of faith on Peyton's part.
I'm wondering if they can alter the details of the cap hell by reworking Manning's contract. For example, how does it work if they pay the bonus to extend the current contract, then renegotiate to a new one after the league year starts? Would the cap numbers from the new deal totally supersede the old ones, or do they persist somehow?
my understanding right now is completely different than my understanding from 4 days ago. I do not believe the Colts can renegotiate this deal at all because the Colts "played the system" by holding off on the 2011 bonus.
When "Sarcasm" first told Brett about the Manning contract and how it worked, it didn't make sense to me, because you can't "prorate money back in time." The Colts aren't "prorating money back in time", however, what they basically did was said, "We don't want to pay you $28MM if you aren't going to be healthy, but by March 8th, we think you'll either be 100% or 0%".
I don't think anyone envisioned Manning being "somewhere between 40-90%" on March 8th. That's what is what is causing problems, the fact that Manning isn't at one end of the spectrum or the other.
So anyhow, with relation to renegotiating the contract, the Colts can do that, but they will be on the hook for all of his bonus money either way, and his base salary in 2012 is only like $7MM.
@GregC Ok, that makes sense about base salary vs bonus. (If I'm understanding you, since the bonus is paid up front, it sticks to the cap no matter what the team does with that player later.)
As to the first part about them playing the system -- seemed like a good bet at the time! If its a league year thing, I guess they could resign him the following league year, but that's an eternity from now, and would need a dozen things to break just so to get there.
Ugh... This sucks.
Greg, good point but you need to check your math.
1) The assumed current Colt's cap number of 120 mil includes 18 mil for Payton. Cut or trade Payton and the starting number should be 102 mil (120-18).
2) The dead cap money from trading or cutting Payton is split over the next two years.
3) The Colts already owe 16 mil due to Payton's signing bonus. This won't change if he is traded or cut.
4) Since the March 8 th roster bonus is due before trading begins (assumes reports that the date cannot be moved), the Colts would incure an additional 28 mil before any trade (but not if cut).
5) The total dead cap money is 16 mil if cut and 44 mil if traded. Again this would be split over the next two years so that would make it 8 mil if cut and 22 mil if traded for the next two years.
So if we start with 102 mil, then the Colts would be at 110 mil if cut and 124 mil if traded. Don't forget that the Colts would have a cap hit in 2013.
If Payton is traded, the Colts would be right at the expected 2012 cap, so they would have to cut productive vets. Most likely the would have to cut Free since he counts 19 mil against the cap and by cutting him the Colts would free up 14 mil. The Colts could also cut Zac Diles getting 1 mil without any dead money. This would put the cap at 109 mil before the draft with only 3 players to replace.
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Okay
1) His name is Peyton
2) Peyton's cap number is 17 or 16, not 18.
3) Still Peyton, ugh
4) Your numbers on 3 - 5 aren't entirely accurate.
5) Don't forget, I gave the Colts $5MM of padding in this article that they probably won't have. At the end of our exercise, the Colts were $10MM over the cap with no veterans and a 53-man roster.
If you remove Manning's $16MM - from your scenario - the Colts would now be $6MM under the salary cap. Let's say they have $7MM in cap space - arrived at by removing the 16MM from Manning and ~1MM from a vet-minimum, we now take away the $5MM from the hypothetical, and the Colts are at $2MM.
So, assuming you're correct, the Colts could, theoretically cut Manning and field a legal team will Manning, Luck, and 40-ish vet minimum contracts.
@GregC
Don't get me wrong. I'm not saying it's smart or doable to trade Payton. I agree with the basic principle or your article. But you have to admit that you counted Payton's current cap hit of 17 mil in the starting number.
1) Yes, his name is Payton. Glad we agree. I'll concede 17 mil instead of 18, but you still need to subtract it from the starting number (or the added dead cap money).
2) Yes still Payton, ugh. Hey you used his name just as much as I did so relax.
3-5) I'd be happy to adjust if you help with the actuals.
3) 20 mil signing bonus with cap hit split over 5 years and 4 mil taken in 2011. How is 20 - 4 = 16 not accurate?
4) March 8 th is the due date for the 28 mil signing bonus. Again how is that not accurate?
5) Cut and owe 16 mil over 2 years. How is 16/2=8 not accurate. Pay roster bonus and trade adds 28 to 16 over 2 years. Again how is 28+16=44/2=22 not accurate.
So 111 mil if cut and 125 mil if traded.
So? The bonus does not accelerate until the trade date which is 2012. As a matter of fact 5.6 mil of the bonus is included in 2011, so it's actually less than even I calculated. The actual is 16 + 22.4 = 38.4 over two years for 19.2.
Leaving 113.4 mil if cut and 122.2 if traded.
I don't see what you mean. They could not trade until the 2012 season begins and they can spread the cap hit over the following two years. That's the way it worked for Hayden as he counts 5.4 mil this year and last year.
According to Joe Bakers's article:
"The Colts have to take this money against the cap, and if he's released or traded they have to take it over the following 2 years."
We both only have the information we have, and we have to base our analysis on the same information.
I do not believe that the Colts can divide the Cost over 2 seasons as you suggest. It is because of the nature of the bonus, it's a 2011 Bonus that is being paid in 2012 (but still the 2011 year).
I do not believe there is any way the Colts can avoid being charged the entire cap hit this season. That's where the numbers are wrong.
Oh crap. I screwed up. I'm really sorry. I honestly wanted to type Peyton and not some stupid slam. Can I blame it on not enough coffee, using an iPad, and/or really bad spelling?
@GregC My name is Payton and I am flattered by your apparent love for me. However I blieve you are talking about Peyton Manning. If we were bandying around these kind of numbers for my salary, I would probably not be commenting on this website.
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And IF... as I am hearing from Nate and John Clayton etc. trading the #1 pick is off the table...
This is death for me, but I believe I now DON'T want the Colts to pay Manning's bonus. Paying Manning only makes sense if you are looking to get a productive 4 more years out of him. And under any scenario, there is no way Luck is sitting for four years. Futhermore, even with Manning playing at a Manning-like level, how competitive a team can the Colts put together with Manning and Luck on the roster?
After last night's Pats/Broncos game, Peyton can't retire. He HAS to come back and he has to win Super Bowls. Not just one more, but plural.
I can not live with anything else. And since the Colts won't trade the #1 pcik immediately making them Super Bowl contenders for the next 4 years with a healthy Manning, then Manning has to go to another team to squash this Brady-mania.
@DougEngland This is probably wishful thinking, but I won't believe trading the pick is off the table until March 9th. Until then, the Colts have every reason to make it seem like they're taking Luck, and virtually no reason not to.
@GregC @DougEngland Oh yeah. Duh. I was thinking that if they don't pay Manning's bonus, then we know for sure they draft Luck. But if they pay it, just another seven weeks of confused fans/ happy bloggers.
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@DougEngland That game last night, sheesh. For me it's a combination of hatred for the Patriots, and respect for Brady's steely resolve as he marches down the field over and over. My wife said "this isn't even fun to watch because he just slow cuts thru the defense". I agree. Without Manning, there's no one who can match Brady's efforts. Especially when he has zero pressure.
Oh Peyton, we need ye so!
Just when I thought we had a shot to get Tebow, you go and drop a bomb like this. Thanks Greg.
I suppose this is the cap issue to which Jim Irsay referred :)
It's a tough, albeit workable spot. It lends support to Irsay's claims that there's a rebuilding project required. There are definitely quite a few vets that won't be back. Brackett? Addai? Clark? Hughes? I can't see all of those guys making it right now.
@Pied Those are the workable options to which I refer. You cannot trade him or release him after March 8 as the cap becomes unmanageable.
